Insurance commissioner warns of rising costs and budgetary obligations for autism coverage; market pressures drive higher auto and homeowners premiums

John Pike, Utah insurance commissioner, told the committee June 18 that the department submitted a proposed update to Utah’s essential health benefit benchmark plan to the Centers for Medicare & Medicaid Services on May 7 so the autism coverage state mandate could be folded into the benchmark instead of being paid from state funds. "If they accept the proposal then it would apply to plan years starting 01/01/2027," Pike said, and the department estimates the current deferred payments the state will owe carriers will decline if CMS approves the change.

Pike described the growth in deferred payments tied to the autism mandate and presented estimates from the department’s actuary: payments the state made in early years were modest but have grown (the department cited $1.4 million for earlier years and later-year claims that led to larger deferred payments), and the department estimated future fiscal-year obligations of increasing amounts for costs incurred in recent years. Tangie Northrup, deputy at the insurance department, said the department carries an $8.5 million ongoing appropriation but recent one-time funding leaves future payments still to be funded by appropriations.

On other health insurance items, Pike briefed the committee on federal-level developments: the potential restoration of enhanced advanced premium tax credits (APTCs) is under active negotiation in Congress and could affect 2026 rates and enrollment, and the federal agencies’ evolving enforcement approach to the Mental Health Parity and Addiction Equity Act complicates state-level enforcement. Pike said Utah’s attorney general advised the department that state code requires enforcement of the parity rule as adopted, so the department is proceeding with enforcement under current state law.

Turning to auto insurance, Pike said Utah’s private auto market remains competitive with an increasing number of companies writing coverage, but average premium-per-vehicle rose from about $953 in 2022 to $1,013 in 2023 and to $1,175 last year. He described market drivers including higher replacement costs for vehicles and more embedded technology and said the uninsured motorist rate has remained around 5%.

On homeowners insurance, Pike said the number of companies writing homeowner coverage in Utah remains near 130, but premiums and per-policy averages have risen sharply in recent years (the department reported multi‑year premium growth and an increase in average policy cost). He told legislators the department is watching insurer nonrenewals and cancellations and that wildfire risk in wildland-urban interface areas (WUI) is contributing to market pressure; he noted HB 48 from the last session relates to that topic. He said some homeowners with cabins or second homes have had difficulty finding or affording coverage and that surplus-lines markets (nonadmitted carriers) can be a costly fallback.

The insurance department said it is preparing another detailed data call (zip-code level) to better identify where premium increases and nonrenewals are concentrated and to provide legislators with more granular evidence about market trends. The commissioner recommended that consumers consult agents, consider mitigation steps (defensible space, roof materials) and shop the market.

Pike also briefed the committee on Medicare/Marketplace policy items including mental-health parity, the possible congressional action on cost-sharing reductions, and the status of enhanced APTCs. He warned that expiration of the COVID-era APTC enhancements could reduce enrollment and increase premiums for those who remain insured through the federal marketplace.

Committee members asked for further detail on actuarial assumptions, rural/urban differences in EMS insurance impacts and whether federal changes would be timely enough for 2026 rate filings. The department said it will return with more granular data and the results of the planned zip-code-level data call.